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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (40759)	9/2/2005 8:40:46 PM
From: ild	Respond to of 110194

Date: Fri Sep 02 2005 15:34 trotsky (Hambone, 10:30) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "trotsky's forecast of a weakening Rand seem to be, at very best, premature." this is the second time someone is saying that, but if you actually re-read my post on the Rand that i made a few days ago, i was actually careful NOT to make that forecast. i only said that the Rand was bumping against the first support/resistance line and enumerated the resistance levels that lay beyond that one SHOULD it be broken. as it is, it wasn't broken obviously, and has produced a strong technical reaction. i'm of course still of the opinion that the Rand is bound to eventually run into problems from a fundamental PoV - sharply rising SA money supply and bank credit as well as a burgeoning trade deficit. on the other hand, i never tire to point out that SA's policy makers, especially its central bank, are extremely conservative and prudent, and have obviously succeeded in convincing the market of their sincerity. this , along with the interest rate differential, is what continues to lend fundamental support to the Rand. still, the Rand has a strong historical correlation with other emerging market currencies ( the last significant bout of weakness e.g. coincided with the Argentina crisis ) - and recently, some are threatening to fall out of bed, like e.g. the Indonesian Rupia and the Philippine peso. the Rand's turn will eventually come, and the fact that other emerging markes are beginning to reel from the simmering energy crisis is a very good reason to monitor it closely ( SA imports almost all of its oil, aside from the small amount the Sasol coal-to-oil conversion plant produces ) .